Council split on office-growth cap

Members struggle to reach consensus on proposed law

The goal may be be clear, but the details continue to bedevil the Palo Alto City Council, which struggled on Monday night to reach a consensus about a proposed cap on new office development.

In its longest meeting of the year, the council debated the specifics of an ordinance that the entire council endorsed earlier this year -- one that would limit new office and research-and-development space in downtown, around California Avenue and along El Camino Real to 50,000 square feet annually.

While the council agreed on Monday on several crucial details, it ran into a stalemate on a technical question with far-reaching implications: Should the cap apply to portions of the city where the council plans to perform "coordinated area plans" aimed at crafting a community vision for land use?

With Councilman Tom DuBois recusing himself from the discussion, the council agonized over the question and after four separate 4-4 votes, agreed to punt the question to the Planning and Transportation Commission.

The council's discussion underscored the complex nature of the office-cap proposal, which was prompted by a recent surge of development in the city's most prominent commercial areas. Since 2001, the California Avenue district has added 234,002 square feet of office space, while downtown saw its share go up by 31,586 square feet. The trend has accelerated in the last four years, with several dense new developments around California Avenue winning approval, frustrating residents who have seen the traffic and parking conditions in the area deteriorate.

To remedy the situation, the council is pursuing an "urgency ordinance" that would contain growth and establish a competitive process for evaluating new projects. Over the course of what at times was a tense discussion, the council reached consensus on an exemption for office projects smaller than 2,000 square feet, another exemption for small medical offices and the criteria for evaluating competing office projects.

The council also agreed to apply the cap to most of the projects currently going through the city's application process. Despite a sharp disagreement over the subject, council members reached a compromise in which these projects will receive preference during the selection process.

Yet the council struggled and ultimately hit a stalemate over the question of coordinated area plans, such as the one that the city conducted for the South of Forest Area more than a decade ago and the one that it plans to perform for the area around Fry's Electronics. That question will now be evaluated by the planning commission and will then return to the council later in the year.

During Monday night's discussion, the council fell into two camps: Marc Berman, Liz Kniss, Greg Scharff and Cory Wolbach championed flexibility and favored exempting area plans from the office cap; Pat Burt, Eric Filseth, Mayor Karen Holman and Vice Mayor Greg Schmid favored a stricter approach with clearer limits and fewer exemptions. These council members argued that carving out an exemption for area plans is premature at best and ill-advised at worst.

Scharff and Berman also supported exempting projects that have already spent more than a year in the city's planning process, with Scharff arguing that including them in the cap so late in the game would be "blatantly unfair."

While the former group suggested that this would give the community and developers the needed flexibility to create the kind of projects that the city wants to see, the latter group countered that this exemption would effectively raise the cap and render it less meaningful.

Wolbach, the chief proponent of flexibility, said excluding area plans from the cap would give developers an incentive to get involved in these community efforts. This would lead them to understand what the residents and the council want and to design their projects accordingly.

"The idea is to encourage developers to start the city's process of planning with a community-centric vision rather than a developer-centric vision," Wolbach said.

Burt countered that this would be a significant exemption and suggested that the council discuss it at a separate meeting, when it would have more time to deliberate. He characterized the proposal to exempt these areas as "chipping away" at the process that the entire council agreed on on March 31.

Filseth asserted that by excluding these areas, the council would be basically adding to the cap. If the community decides, for instance, to add 30,000 square feet to the Fry's site and the square footage does not count against the 50,000-square-foot cap, the "unintended consequence" is that the cap essentially gets raised to 80,000 square feet.

Wolbach, however, said that most of the complaints coming from the public revolve around parking, traffic and the city's high ratio of jobs to employed residents. If developers propose projects that completely take care of these impacts, they should be allowed to build, he argued. Projects of this sort would have to include housing and robust transportation-demand-management programs that discourage occupants from driving.

"I'm talking about setting a high bar," Wolbach said. "I don't think we should be afraid of having very high standards."

Berman agreed that this approach is worth pursuing.

"I do think we have a lack of housing in Palo Alto and Silicon Valley as a whole," Berman said. "I do think a development cap, as was mentioned by a lot of people tonight, is a blunt tool. This is a way to use the blunt tool to our advantage."

The proposal initially split the council, though members ultimately agreed to raise the bar even higher and only exempt projects that not only mitigate their own impacts but also improve the overall traffic and parking conditions in the their respective areas.

Burt suggested that the city "may not get any projects that meet the requirements" but ended up backing this proposal as part of a 6-2 vote, with Schmid and Filseth dissenting.

"This is the kind of competition we want to create on really exceptional projects that would be what we need in the future to have development without exacerbation of our current problems," Burt said.

Filseth disagreed and called the proposed exemption "too vague."

"We don't even have this ordinance yet and we're already putting exemptions and loopholes in it," Filseth said. "It's too soon."

Another big disagreement came over the topic of projects in the pipeline. The battle lines were generally the same, with the slow-growth "residentialist camp" supporting including these projects in the cap. For one of these projects, a three-story mixed-use building at 441 Page Mill Road, this proved to be a moot point after the council voted to approve it early Tuesday morning. For the rest, the vote means that getting the city's approval just became trickier.

Projects that have been going through the process for many months but have not yet received approval include a 28,200-square-foot project at 2747 Park Blvd. and a 29,120-square-foot project at 3045 Park Blvd.

Scharff said that he was "very uncomfortable" with the council's decision to include them in the cap.

"I want to understand if it's OK to be arbitrary and capricious if we did this," Scharff said, using adjectives that connote a legal standard for unreasonable denial of applications.

Holman countered that the two Park Boulevard projects are among the biggest in the pipeline and that the city should not approve them before putting together a broader concept plan for the California Avenue area, a process that has been moving along in fits and starts for nearly a decade.

"We're developing the site without having a plan in place," said Holman.

The council ultimately reached a compromise in which projects would be subject to the cap but would be given preference if they had been going through the planning process for a year or more. Schmid was the sole dissenter in the 7-1 vote.

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27 people like this
Posted by Downtown Worker
a resident of Menlo Park
on Jun 16, 2015 at 9:23 am

While I think Councilmember Burt ultimately crafted a reasonable compromise with the yearly office cap, it's based on the idea that we need to space out office growth so we can address the impacts. Area plans are already a tool to carefully design growth so that impacts are addressed.

For example, the SOFA plan got community input around housing and ultimately requires additional affordable housing and the creation of Heritage Park as a benefit in exchange for building there. This was already addressing the impact of the additional housing on park space in University South.

Area plans are an ideal way to plan growth - once you've done one, the rationale for metering that growth no longer applies. It should be dictated by the Area Plan, not by a central plan that isn't sensitive to community input or the context of the site.

20 people like this
Posted by Mila Z
a resident of Fairmeadow
on Jun 16, 2015 at 9:56 am

Thank you to Council for taking the time to address our jobs/housing imbalance last night. We have a housing shortfall and our city is not alone as many communities up and down the Peninsula are wrestling with how to maintain a healthy, growing economy while dealing with decades of pent up demand for housing supply. I think the center of the issue is a concern for impacts that come with growth: housing availability, traffic, parking, not necessarily the jobs themselves.

I'd like to reiterate:
- Wouldn't we want projects that address the impacts we are concerned about (lack of avail housing, address transportation demand)? I do.
- Comments observed at the Summit were favorable to offsets over increasing cap IF we as a community can collaborate with property owners, ensuring we agree on what the benefits are.
- Let's encourage those kinds of projects through a Specific or Area plan like what happened at the South of Forest Area to create Heritage park. I think a lot of people would agree that the collaboration that happened there is a good example of quality design that took into consideration the neighborhood context while adding to our housing supply.

2 people like this
Posted by resident 1
a resident of Adobe-Meadow
on Jun 16, 2015 at 10:03 am

I agree that different areas of the city have different requirements - El Camino south is the condo / hotel growth section, Stanford Research Park is the business section, etc. However the divide and conquer strategy for a town that is 26 square miles - a lot of which is parkland / bayland is not a good idea.
Look at the other topics being discussed - the waste disposal effort, the school management effort, the transportation control effort - these are all topics which require a unified approach across the city so that all residents / businesses are getting equal treatment and cost outlay for what the city is expected to provide - police / fire control, educational system, etc.
We are not a big city, we do not have a complex transportation system like San Jose, we are limited in many of the big city type infrastructure required for a huge variety of business models.
We need to effectively manage the 26 square miles of city to comprehensively produce the best city results.

9 people like this
Posted by Clean house
a resident of Crescent Park
on Jun 16, 2015 at 11:12 am

Planning Director Gittelman acts like she works for developers rather than the residents of PA. It was astounding to listen to her defending the newly proposed Page Mill project at last nights council meeting. If you didn't already know that she works for the city you would have sworn she was on the payroll of the developer.
The Old Palo Alto neighborhood should begin to brace for office workers parking in their neighborhood in the next two years. Cal Ave workers will park in Old PA and walk under the tunnel to their Park Ave offices. The residents should start preparing and organizing to fight this upcoming parking problem.

4 people like this
Posted by resident 1
a resident of Adobe-Meadow
on Jun 16, 2015 at 11:40 am

Downtown Worker is indicating Menlo Park as the residence. That means they are paying their taxes to the County of San Mateo and Menlo Park. Isn't it lucky for them that Menlo Park is going to start a huge development project to entice more businesses to that city. Then the Menlo Park people can slice and dice their respective opinions on their own city.

While I realize that we have a lot of people working here who live elsewhere I am concerned that people whose tax dollars are going to a different city and county are offering up opinions and advice concerning major decisions as to how this city is managed and run. I think their cities would be well served if they offered

29 people like this
Posted by leadership
a resident of Downtown North
on Jun 16, 2015 at 11:55 am

Mr. Wolbach has shown consistent leadership, especially in comparison with some of his colleagues on the council with more life experience. He crafted a thoughtful proposal aimed at addressing the roots of the problem. He was working with other councilmembers, including those who are normally in stark ideological opposition. Others could learn a lot from him. It's a good sign for our next generation of Palo Alto leadership (and shows that we should probably try to get more Gunn High grads into city government!)

2 people like this
Posted by Joe
a resident of Another Palo Alto neighborhood
on Jun 16, 2015 at 6:18 pm

> With Councilman Tom DuBois recusing himself from the discussion

Why did DuBois recuse himself from this discussion?

The voters put him on the Council to deal with hard issues--not hide from them.

8 people like this
Posted by Jane
a resident of Evergreen Park
on Jun 16, 2015 at 6:28 pm

[Post removed.]

4 people like this
Posted by Agenda
a resident of Another Palo Alto neighborhood
on Jun 16, 2015 at 7:14 pm

Perhaps the weekly would,like to report on why one of their council members recused himself from the discussion. At least it kept one of the more out of touch members from muddying the waters

4 people like this
Posted by Michael
a resident of University South
on Jun 16, 2015 at 9:50 pm

"For example, the SOFA plan got community input around housing and ultimately requires additional affordable housing and the creation of Heritage Park as a benefit in exchange for building there."

That's the official line. The reality is that the city staff allowed the community the illusion of crafting their neighborhood's future, then let a coalition of developers Summerhill Homes and James Baer define the outcome at the last minute. The city staff told the Council that outcome was the neighborhood's plan, and a giddy Council ignored the neighborhood residents' protests to give the developers all they wanted. The city even bought the old clinic building, which it had and still has no use for, then demolished part of it at taxpayer expense to make room for the luxury condos behind it.

2 people like this
Posted by Iconoclast
a resident of University South
on Jun 16, 2015 at 9:57 pm

"Why did DuBois recuse himself from this discussion?"

Because he's an honest man. The real question is why DIDN'T Burt, Wohbach, Kniss, Berman, and Scharf recuse themselves?

6 people like this
Posted by Pat Markevitch
a resident of Downtown North
on Jun 16, 2015 at 10:41 pm

Tom DuBois recused himself because of a potential conflict of interest according to the FPPC rules. His wife works for Stanford so anything that has to do with the University or the Stanford Research Park he has to recuse himself. This is not new, other members in the past have had to do that. I am glad that he is erring on the side of caution.

5 people like this
Posted by sunshine
a resident of Barron Park
on Jun 17, 2015 at 9:19 am

Michael is the only one who has the right idea--we all want a SOFA type of housing element in out neighborhood if there are to be any changes. None of the other neighborhoods want a concrete wall rising without windows from the edge of a narrow sidewalk with no greenspace and insufficient parking for the residents, visitors and other users of the facility. However, Barron Park and other nearby areas have such ugly buildings foisted on them by the City Council and developers.
City Council needs to stop allowing concrete blocks without street facing windows or green areas to all be located south of Page Mill/Oregon.
Offices and any non-retail businesses should be located in Stanford Industrial Park, the new business area near the former location of Mings (east of Middlefield) and the easternmost side of Palo Alto near 101 or along SandHill Road. Then University and California Avenues should be converted to pedestrian walkways. This would allow retail establishments and local restaurants to provide outside eating and display without obstructing pedestrian traffic. The streets to either side should be made one way to allow for vehicular movement in a more orderly manner.
Only local retail and local restaurants should be allowed on University and California Avenues. Those non-conforming establishments presently in operation could be allowed to continue for now.
Palo Alto has already driven most of the most interesting small retail establishments and decent restaurants to nearby cities. Perhaps they would like the residents who continue to face council desire to squeeze new developments into their neighborhoods to also move to Menlo Park, Los Altos, Mountain View also.

2 people like this
Posted by Jane
a resident of Evergreen Park
on Jun 17, 2015 at 12:13 pm

Larry Kline's wife also worked at Stanford so for the last eight years he had to excuse himself from council discussions involving decisions that affected Stanford.

I shall be dismayed if this means Tom cannot be involved in any land use decisions where Stanford owned property is located. By this I particularly mean the new Comprehensive Plan currently being crafted.

2 people like this
Posted by stagger developments
a resident of Evergreen Park
on Jun 17, 2015 at 1:52 pm

I agree with Clean House. Old Palo Alto has been untouched by all of this and they need to stop being quiet and chime in on the problems of Palo Alto. They will soon be impacted.

Also, I beg the city to stagger these developments. They have such a large impact of nearby residents especially the ones in the Cal Ave area it was so difficult to get around during that construction that if they start all of these newly approved developments at the same time it'll all be a mess. There should be an ordinance that large developments in a certain radius of each other can't overlap at all.

4 people like this
Posted by Jane
a resident of Evergreen Park
on Jun 17, 2015 at 4:19 pm

The planning staff are required to provide an analysis and mitigation plan for how construction is to be managed as part of their their staff report and/or the Environmental Impact Report. Unfortunately this requirement has been given short shrift by staff. Apart from the big intersections, staff appear to have almost no knowledge of local traffic conditions around town any more, basing their analysis on out of date or incomplete data. Sadly a side affect of staff having to commute here because they can no longer afford to live in Palo Alto. Which works, of course, in a developer's favor.

In addition, if a project has languished for more than either two or three years staff are required to update the traffic analysis. This is ignored, even when pointed out by members of the public to prior councils.

6 people like this
Posted by Joe
a resident of Another Palo Alto neighborhood
on Jun 17, 2015 at 5:07 pm

This office cap does not involve Stanford directly--unless it involves Stanford Research Park properties. Even if it did, the whole idea of recusal is based on the possibility that a Council action would enrich a Council member, or his/her spouse. This particular action by the Council is so broad, that it would seem impossible for a cap on office space would enrich anyone on the Stanford campus.

DuBois should spend a few dollars and have his situation reviewed by a lawyer. These land use cases are so important to Palo Alto that if he is going to recuse himself every time they come up--then he should resign from the Council now. If he won't resign--maybe a recall would send him a message.

15 people like this
Posted by Agenda
a resident of Another Palo Alto neighborhood
on Jun 17, 2015 at 5:15 pm

As Jane asked, will Tom have to recuse himself from all land use decisions involving Stanford as in this case?
I find that hysterical-- one of the anti development group ends up one person short!!! I wonder if Tom made that issue clear to the voters before the election.
Personally, I think it is great that one of the obstructionists to progress in the city may be silenced on certain issues.

Sorry, but further commenting on this topic has been closed.

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